Canada’s Rogers Communications plans a soft launch of its licensed white-label version of Comcast’s X1 platform, with the technology set to gradually roll out across the cable operator’s footprint over the next several years.
“Right now, we’re going through a process of methodically going from labs trials to tech trials to employee trials to soft launch, and then full launch,” said Rogers President and CEO Joe Natale, speaking to investors Thursday during Rogers’ second-quarter earnings call. A transcript of the event was provided by Seeking Alpha.
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“It will take a number of years before we fully replace the entire base,” Natale added. “Now, there are some benefits to be had by decommissioning the QAMS and logging into a kind of digital capability that we have across the board and going full IP. No question, we’re focused on that. But at the same time, we are not intent on disrupting our entire customer base”
Rogers, which lost another 25,000 pay-TV subscribers in the second quarter, hopes X1 will deliver the same benefits of higher customer satisfaction and reduced churn that it has for Comcast. While every other major U.S. cable operator continued to lose video customers in 2016, Comcast actually grew its pay-TV base by 161,000 users.
While Rogers won’t disclose what it’s paying Comcast to license X1, suffice it to say the integration isn’t cheap. Natale said Rogers is in the middle of an “investment cycle,” building out not only X1, but also DOCSIS 3.1.
Rogers CFO Tony Staffieri said he expects soup-to-nuts installation costs of pay-TV services—including labor and CPE—to drop from the current level of about $1,000 per customer to around $400, with X1’s streamlined, cloud-based configuration replacing expensive DVRs and lending itself to self-installation.
“That about it terms of today's world with set-top boxes that have hard drives within them. You have an average per household of just over two of those. You include the modem—I mean you have installation, the box and really the three primary items that get you to $1,000 today. With the X1 platform and cloud-based operating system, you can see is capex for the set-top boxes coming way down.